Quiet Title and Statute of Limitations

In the search for a magic bullet, many pro se litigants and even attorneys have ended up perplexed by laws and rules regarding an action to Quiet Title (frequently misspelled by pro se litigants as “Quite Title”). The purpose of this article is to add some context to the discussion and some reasons for my conclusion — that as more decisions emerge the action for Quiet Title will fade unless the mortgage of record is first nullified or canceled.

For context, let’s remember that the purpose of recording documents in the Public Records is to give certainty and notice to the world of transactions that can be recorded. If courts were to issue decisions to quiet title on recorded documents that are facially valid, the result would be chaos — nobody would know if they were really getting permanent title and title insurance companies would, for obvious business reasons, refuse to issue a title commitment or policy unless EVERYONE brought a quiet title action after every transaction and received a court order, suitable for recording that stated the rights of the stakeholders. This is precisely what the recording statutes are meant to avoid.

Now to the issue of the statute of limitations. Some states hold that even if there is an act of acceleration, the statute of limitations only applies to the monthly payments that were due during the statutory period that are now time-barred. Florida does not appear to be one of those states, and despite some decisions to the contrary, it doesn’t look to me like Florida will become one of them. In Florida it is generally accepted that the statute of limitations time bars any action after 5 years to collect a debt. You should check your state statutes because each state is different and don’t make any decisions without consulting a qualified attorney licensed in the jurisdiction in which your property is located.

So the thinking has gone in the direction of merely stating that the claim is time-barred if there was an acceleration of the debt, and five years as passed. But the Romero v SunTrust decision (see below) from last year, raises the real issues. While the Bank had no right to bring a claim on the note, and presumably had no right to bring an action on the mortgage, the mortgage remains on record. Alleging that the statute of limitations bars any action on the note or mortgage does not invalidate the mortgage. If it is facially valid and properly recorded, it is there in the County records for all to see.

So the question arises “What happens at a subsequent closing on the sale of the property or refinance, and the Mortgagee (or party claiming to be the successor of the mortgagee) refuses to execute a satisfaction of mortgage without receiving payment?” Is THAT a claim that is time-barred? The answer is I don’t know, but I suspect that the refusal to execute a satisfaction of mortgage is an act that is separate from bringing an action to collect on a time-barred debt.

I suspect that an action for equitable relief demanding a Court order to force the Bank into executing a satisfaction of mortgage would fail. That is essentially the same as asking the Court to issue a quiet title order stating that the mortgage is invalid — a precedent that raises numerous hazards in the marketplace. Essentially you are saying that you did have the debt, the bank is time barred from enforcing it, so you want the mortgage nullified or canceled. Several Courts have issued ruling consistent with this ruling so I don’t want to give the impression that what I am saying is the general rule — what I am saying is that I think my theory of the action will become the general rule.

My theory, supported by case law in other states, is that you must have grounds to attack the validity of the instrument and win your case before you can then ask for a decision on Quiet Title. Fortunately, in the context of loans and title subject to claims of securitization, such an attack is eminently possible and likely to succeed on an increasing basis. But in order to do so, one must be very conversant in the claims of securitization generally and especially knowledgeable as to claims of succession or securitization in your specific case. Alleging that this particular defendant has been repeatedly found in court to lack the indicia of ownership or authority to enforce a note and mortgage may not do you any good. You are still left with the question of what to do with a facially valid mortgage encumbrance recorded against the property. If the person you sued doesn’t own it, who does?

After years of avoiding the right strategies, lawyers are coming around to the idea that in order to be truly successful in an action to remove the mortgage encumbrance, you need to have an allege facts to support the claim that the mortgage deed (or Deed of Trust) was invalid in the first instance or that it could not be enforced even if the statute of limitations was not applicable. THEN alleging the statute of limitations is a good idea as corroboration for your logic that the mortgage is invalid because it is unenforceable and without merit in all instances.

There are two such attacks that are promising:

1. Attack the initial closing as lacking consideration or giving rise to common law or statutory rescission. If statutory rescission applies, the law states that the encumbrance is terminated by operation of law. (TILA). The allegation that the opposing bank is a “holder” (according to them) is insufficient to bar your attack on the initial closing. The problem of course is that the banks regularly confuse judges into applying the rules of a holder in due course when the Bank itself makes no such assertion. Hence, being able to remind or educate the judge on the differences between holders, holders with rights to enforce and holder in due course is essential and must be presented with clarity. If you don’t understand the differences you are not prepared for the hearing.

2. Attack the subsequent acquisition of the “loan”, debt, note and/or mortgage also as being a sham lacking in consideration AND of course in violation of the PSA. The point to remember here is that the “assignment” or “endorsement” (almost always fabricated, forged or unauthorized) is only an OFFER in which case the Trustee of the REMIC trust must accept the offer and then pay for it. In fact most PSA’s require a letter of opinion from counsel for the Trust indicating that no negative tax impact will result on the Trust’s REMIC status. Three things we know to be true in most cases: (a) the Trustee never accepted the transfer and (b) The trust never paid for the loan and (c) a loan already declared in default is not susceptible to acceptance by the trust. Keep in mind that most trusts are governed by New York Law which says that such transactions are void, not voidable.

So let us assume that you have a receptive Judge who agrees that the transfer to the trust never occurred or even that the original loan documents lack consideration from the named Payee on the note (and of course the named Mortgagee/beneficiary under the Mortgage). In my opinion you are still only half way to home base. No home run yet, although I think the law will evolve where that IS sufficient to remove the mortgage encumbrance.

So now what? You have still sued parties whom you have proven have no interest in the mortgage. The question is whether you have eliminated the possibility of ANY party (who has no notice of the action) having an interest in the debt, note or mortgage. And many judges will reply that you have put on a pretty good case but you still have not identified the creditor — an odd twist on the defensive actions in foreclosure cases.

My opinion is that you need to allege a fact pattern, where appropriate, that states that Wall Street investors advanced the money to the borrower without knowing that their money was not going through the trust. Hence a direct relationship arose by operation of law between the borrower, as debtor and the investors as creditors. Those investors are creditors not as Trust beneficiaries but rather personally, because the money never went through the trust. The allegation is that they were cheated by intervening fraudulent behavior or negligent behavior on the part of the broker dealer who sold them the securities of an empty REMIC Trust that never received the proceeds of sale of the REMIC RMBS.

At this point you can properly argue that  the investors were entitled to a note and mortgage by virtue of the securitization documents that were used to fraudulently induce them to part with their money. The allegation should be that they didn’t get it and that putting the name of sham “nominees” did not accrue to the benefit of the investors but rather inured to the benefit of intermediaries who were not lending money in your transaction.

Either way, you say that as to the debt between the mortgagor homeowner and whoever else might be making a claim, the initial mortgage encumbrance is now and/or has always been invalid and unenforceable because they recite facts based upon a non-existent transaction, that the mortgage has been split from the note, that the note has been split from the debt, and through no fault of the homeowner, there is no note or mortgage inuring to the benefit of the actual creditors. The cherry on top is that there is no such thing as an equitable mortgage — for the same reasons that courts are reluctant to grant quiet title actions — it would cause chaos in the market place and raise uncertainty that the recording statutes are intended to avoid.

See Romero v SunTrust Statute of Limitations 9-3-2013

See also “a new and different breach” Singleton v Greymar Fla S Ct 882 So2d 1004 9-15-2004

And on collateral estoppel Kaan v Wells fargo Bank NA Case 13-80828-CIV 11-5-13

For further information, call 954-495-9867 or 520-405-1688.

Are you a candidate for Florida’s Hardest Hit Fund relief for Foreclosure Victims? See Florida Hardest Hit Fund

 

 

9th Circuit (Federal) Allows Quiet Title and Damages for Wrongful Filing of False Documents

Hat Tip to Beth Findsen who is a good friend and a great lawyer in Scottsdale, Az and who provided this case to me this morning. I always recommend her in Arizona because her writing is spectacular and her courtroom experience invaluable.

This case needs to be analyzed further. Robert Hager (CONGRATULATIONS TO HAGER IN RENO, NV) et al has succeeded in getting at least a partial and significant victory over the MERS system, and voiding robosigned documents as being forged per se. I disagree that a note and mortgage, once split, can be reunified by mere execution of an instrument. They are avoiding the issue just like the “lost note” issue. The rules of evidence and pleading have always required great factual specificity on the path of transactions leading up to the point where the note was lost or transferred. This Court dodged that bullet for now. Without evidence of the trail of ownership, the money trail and the document trail all the way through the system, such a finding leaves us in the dark. The case does show what I have been saying all along — the importance of pleading and admitting to NOTHING. By not specifically stating that there was no default, the court concluded that Plaintiffs had failed to establish the elements of wrongful foreclosure and left open the entire question about whether such a cause of action even exists.

But the more basic issue us whether the homeowner can sue for quiet title and damages for slander of his title by the use and filing of patently false documentation in Court, in the County records etc. The answer is a resounding YES and will be sustained should the banks try to move this up the ladder to the U.S. Supreme Court. This opinion changes again my earlier comments. First I said you could quiet title, then I said you first needed to nullify title (the mortgage) before you could even file a quiet title action. Now I revert to my prior position based upon the holding and sound reasoning behind this court decision. One caveat: you must plead facts for nullification, cancellation of the instrument on the grounds that it is void before you can get to your cause of action on quiet title and damages for slander of the homeowner’s title. My conclusion is that they may be and perhaps should be in the same lawsuit. This decision makes clear the damage wrought by use of the MERS system. It is strong persuasive authority in other jurisdictions and now the law for all courts within the 9th Circuit’s jurisdiction.

Here are some of the significant quotes.

Writing in 2011, the MDL Court dismissed Count I on four grounds. None of these grounds provides an appropriate basis for dismissal. We recognize that at the time of its decision, the MDL Court had plausible arguments under Arizona law in support of three of these grounds. But decisions by Arizona courts after 2011 have made clear that the MDL Court was incorrect in relying on them.
First, the MDL Court concluded that § 33-420 does not apply to the specific documents that the CAC alleges to be false. However, in Stauffer v. U.S. Bank National Ass’n, 308 P.3d 1173, 1175 (Ariz. Ct. App. 2013), the Arizona Court of Appeals held that a § 33-420(A) damages claim is available in a case in which plaintiffs alleged as false documents “a Notice of Trustee Sale, a Notice of Substitution of Trustee, and an Assignment of a Deed of Trust.” These are precisely the documents that the CAC alleges to be false.
[Statute of Limitations:] at least one case has suggested that a § 33-420(B) claim asserts a continuous wrong that is not subject to any statute of limitations as long as the cloud to title remains. State v. Mabery Ranch, Co., 165 P.3d 211, 227 (Ariz. Ct. App. 2007).
Third, the MDL Court held that appellants lacked standing to sue under § 33-420 on the ground that, even if the documents were false, appellants were still obligated to repay their loans. In the view of the MDL Court, because appellants were in default they suffered no concrete and particularized injury. However, on virtually identical allegations, the Arizona Court of Appeals held to the contrary in Stauffer. The plaintiffs in Stauffer were defaulting residential homeowners who brought suit for damages under § 33-420(A) and to clear title under § 33-420(B). One of the grounds on which the documents were alleged to be false was that “the same person executed the Notice of Trustee Sale and the Notice of Breach, but because the signatures did not look the same, the signature of the Notice of Trustee Sale was possibly forged.” Stauffer, 308 P.3d at 1175 n.2.
“Appellees argue that the Stauffers do not have standing because the Recorded Documents have not caused them any injury, they have not disputed their own default, and the Property has not been sold pursuant to the Recorded Documents. The purpose of A.R.S. § 33-420 is to “protect property owners from actions clouding title to their property.” We find that the recording of false or fraudulent documents that assert an interest in a property may cloud the property’s title; in this case, the Stauffers, as owners of the Property, have alleged that they have suffered a distinct and palpable injury as a result of those clouds on their Property’s title.” [Stauffer at 1179]
The Court of Appeals not only held that the Stauffers had standing based on their “distinct and palpable injury.” It also held that they had stated claims under §§ 33-420(A) and (B). The court held that because the “Recorded Documents assert[ed] an interest in the Property,” the trial court had improperly dismissed the Stauffers’ damages claim under § 33-420(A). Id. at 1178. It then held that because the Stauffers had properly brought an action for damages under § 33-420(A), they could join an action to clear title of the allegedly false documents under § 33-420(B). The court wrote:
“The third sentence in subsection B states that an owner “may bring a separate special action to clear title to the real property or join such action with an action for damages as described in this section.” A.R.S. § 33-420.B. Therefore, we find that an action to clear title of a false or fraudulent document that asserts an interest in real property may be joined with an action for damages under § 33-420.A.”
Fourth, the MDL Court held that appellants had not pleaded their robosigning claims with sufficient particularity to satisfy Federal Rule of Civil Procedure 8(a). We disagree. Section 33-420 characterizes as false, and therefore actionable, a document that is “forged, groundless, contains a material misstatement or false claim or is otherwise invalid.” Ariz. Rev. Stat. §§ 33-420(A), (B) (emphasis added). The CAC alleges that the documents at issue are invalid because they are “robosigned (forged).” The CAC specifically identifies numerous allegedly forged documents. For example, the CAC alleges that notice of the trustee’s sale of the property of Thomas and Laurie Bilyea was “notarized in blank prior to being signed on behalf of Michael A. Bosco, and the party that is represented to have signed the document, Michael A. Bosco, did not sign the document, and the party that did sign the document had no personal knowledge of any of the facts set forth in the notice.” Further, the CAC alleges that the document substituting a trustee under the deed of trust for the property of Nicholas DeBaggis “was notarized in blank prior to being signed on behalf of U.S. Bank National Association, and the party that is represented to have signed the document, Mark S. Bosco, did not sign the document.” Still further, the CAC also alleges that Jim Montes, who purportedly signed the substitution of trustee for the property of Milan Stejic had, on the same day, “signed and recorded, with differing signatures, numerous Substitutions of Trustee in the Maricopa County Recorder’s Office . . . . Many of the signatures appear visibly different than one another.” These and similar allegations in the CAC “plausibly suggest an entitlement to relief,” Ashcroft v. Iqbal, 556 U.S. 662, 681 (2009), and provide the defendants fair notice as to the nature of appellants’ claims against them, Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011).
We therefore reverse the MDL Court’s dismissal of Count I.
[Importance of Pleading NO DEFAULT:] The Nevada Supreme Court stated in Collins v. Union Federal Savings & Loan Ass’n, 662 P.2d 610 (Nev. 1983):
An action for the tort of wrongful foreclosure will lie if the trustor or mortgagor can establish that at the time the power of sale was exercised or the foreclosure occurred, no breach of condition or failure of performance existed on the mortgagor’s or trustor’s part which would have authorized the foreclosure or exercise of the power of sale. Therefore, the material issue of fact in a wrongful foreclosure claim is whether the trustor was in default when the power of sale was exercised…. Because none of the appellants has shown a lack of default, tender, or an excuse from the tender requirement, appellants’ wrongful foreclosure claims cannot succeed. We therefore affirm the MDL Court’s of Count II.
[Questionable conclusion on “reunification of note and mortgage”:] the Nevada Supreme Court decided Edelstein v. Bank of New York Mellon, 286 P.3d 249 (Nev. 2012). Edelstein makes clear that MERS does have the authority, for purposes of § 107.080, to make valid assignments of the deed of trust to a successor beneficiary in order to reunify the deed of trust and the note. The court wrote:
Designating MERS as the beneficiary does . . . effectively “split” the note and the deed of trust at inception because . . . an entity separate from the original note holder . . . is listed as the beneficiary (MERS). . . . However, this split at the inception of the loan is not irreparable or fatal. . . . [W]hile entitlement to enforce both the deed of trust and the promissory note is required to foreclose, nothing requires those documents to be unified from the point of inception of the loan. . . . MERS, as a valid beneficiary, may assign its beneficial interest in the deed of trust to the holder of the note, at which time the documents are reunified.
We therefore affirm the MDL Court’s dismissal of Count III.

Here is the full opinion:

Opinion on MDL

For further information or assistance, please call 520-405-1688 on the West Coast and 954-495-9867 on the East Coast.

What About All Those Cases Where Foreclosure Was Dismissed?

As I predicted in 2009, the number of cases where foreclosure had been simply dismissed without further action has increased exponentially. The homeowner is normally afraid to take any proactive stance for fear of awakening the giant who will then respond by filing another foreclosure. Some of these cases are as much as 10 years old which goes beyond the statute of limitations in virtually all jurisdictions. As a caveat, let me add that there are states in which the statute of limitations is “ongoing” which means that the entire action is not barred by the statute of limitations; instead, in states where this doctrine is applicable, each new payment due gives rise to a new Period where the statute of limitations begins to run.

The number of inquiries I am receiving based on this scenario has been steadily increasing for the last year. At this point I would say it is accurate to say that I am receiving inquiries at the rate of 3 to 5 per day involving cases in which foreclosure has gone into a state of “limbo”. In most cases the time between the disappearance of the pretender lender at the present time has been a period of years.

There are several strategies that might be applicable and you should contact a licensed attorney who is practicing in the area in which your property is located before you make any decision about taking action or not taking action.

The first strategy which is being followed by most people at this time is doing absolutely nothing. These are people who’ve been living without paying rent or mortgage payments and who hopefully have been wise enough to pay the taxes and insurance. If they haven’t paid the taxes they could lose the home as a result of the tax lien. There most likely entitled to relief under some cause of action like nullification of instrument or a lawsuit to quiet title and may be entitled to damages under various statutes or common law doctrines. In judicial states where the action has been dismissed, most lawyers agree that the dismissal of the action should be recorded in the county records that keep track of transactions involving property.

Another strategy which is being followed by an increasing number of people is a lawsuit to quiet title and nullify the mortgage. The lawsuits to quiet title are getting more traction than any efforts to nullify the mortgage. This is because the homeowner cannot identify whether there is an actual creditor and who that creditor might be. But that is what constructive service of process is all about. You publish the notice in a legal newspaper to let the world know that there is a pending action in which anyone who is claiming a right property, directly or indirectly, or claiming a right under the mortgage or note, might be negatively affected by the outcome of the litigation. If the judge accepts that there is a good possibility that in the absence of anybody coming into court to defend the action a default will be entered along with a final judgment.

I know several hundred cases in which such final judgments have been entered resulting in the elimination of the mortgage and note completely.  Frankly I think most of the cases should be resolved by elimination of the mortgage and potentially avoid the note as an instrument upon which party could rely enforce the collection of a debt.  That would still theoretically leave a debt owed by the borrower to an unknown creditor.

Some interesting questions arise when servicer’s case against the borrower has been dismissed by the creditor has not been informed. The argument would be that the servicer as an agent of the creditor has notice and therefore his principal has notice. This would only be true if the servicer was operating under the provisions of the pooling and servicing agreement. But the provisions of the pooling and servicing agreement would not apply unless the trust was the  creditor. if the investors realize that their interest in the loan arises not because of their purchase of bogus mortgage bonds but rather because their money was used directly to fund the origination or acquisition of loans, then the servicer has no written agreement upon which you can rely for its power to enforce collection of the debt, the note or the mortgage.

There are several other strategies that are in use right now which I do not wish to elaborate upon. I suspect that they may be successful only because they are not on the radar for the banks or the attorneys for the banks. So I don’t want to do anything that might impair the ability of some borrower out there to get the relief that he deserves.

In all cases the homeowner should obtain a full title and securitization report. This can be obtained from us or any number of other reputable vendors. If you are purchasing or selling a home or attempting to refinance it probably should take extra steps to assure that there are no defects in the chain of title and especially no defects in connection with the satisfaction or release of the existing mortgage. In all probabilities those defects exist. I have been receiving an increasing number of inquiries from people who wish to purchase a home but after reading what is available on the Internet have realized that they might not get clear title. Thus they come to us to review the transaction and give our opinions as to what defects might exist and what to do about them.

For information about our services please call 520-405-1688

 

Only $4 Billion of JPM $13 Billion Settlement Goes for “Consumer Relief”

For assistance in understanding the content of this article and purchasing services that provide information for attorneys and homeowners see http://www.livingliesstore.com.

Josh Arnold has written an interesting article that reveals both realities and misconceptions arising from gross misconceptions. His misperceptions arise primarily from two factors. First he either ignores the fact that JPM was integrally involved in the underwriting, sale and hedging of the alleged mortgage bonds, never actually acquired the loans or the bonds on which they claimed a loss, and made huge “profits” from fictitious trades disguised as “proprietary” trading which was a cover for tier 2 yield spread premiums that were never disclosed to investors or borrowers. The deregulation of those mortgage securities may have provided cover for the fraud that occurred to investors, but the failure to disclose this “compensation” to borrowers violates the truth in lending act and state deceptive lending laws.

Second, the article is based upon a point of view that is not surprising coming from a Wall Street analyst but which is bad for the country. The ideology behind this is clear — Wall Street is there to make money for itself. That has never been true. Wall Street exists solely because in a growing and complex economy, liquidity must be created by breaking up risks into portions small enough to attract investors to the table. Whether they make money or not depends upon their skill in running a company.

Unfortunately in the early 1970’s the door was flung wide open when broker-dealers were allowed to incorporate and go public. Just ask Alan Greenspan who believed the markets would self correct because the players would act rationally in their own self interest. As he he says in his latest book, the banks did not act rationally nor in their own best interest because they were being run by management that was acting for the self interest of management and not the company. Back in the 1960’s none of this would have occurred when the broker-dealers were partnerships —leading partners to question any transaction by any partner that put the partners at risk. Now the partners are remote and distant shareholders who are among the victims of management fraud or excess risk taking.

The effect on foreclosure defense is that, at the suggestion of the former Fed Chairman, we should stop assuming that the broker dealers that are now called banks were acting with enlightened or rational self-interest. The opening and closing statement should refer to the information like this article Quoted below as demonstrating that the banks were openly violating common law, statutory, and administrative rules because the losses from litigation would not be a liability of the actual people who caused the violations.

Any presumption in favor of the foreclosing bank should be looked at with intense skepticism. And in discovery remember to ask questions about just how bad the underwriting process was and revealing the absolute fact, now proven beyond any reasonable doubt, the goal was for the first time NOT to minimize risk, but rather to force applications to closing because of giant profits that could be booked as soon as the loan was sold, since at the time of closing the loans were already part of a reported chain of securitization. Investigation at real banks as opposed to “originators” will reveal two sets of underwriting rules and practices — one for their own portfolio loans in compliance with industry standards and the other for the vast majority of loans that were claimed to be part of a fictitious cloud of securitization that did not comply with industry standards.

In the end my initial assessment in 2007-2008 on these pages is proving to be true. The unraveling of this mess will depend upon quiet title lawsuits and lawsuits for damages resulting from violations of the Truth in Lending Act — where those gross profit distortions at the broker-dealer level are required to be paid to the homeowner because they were not disclosed at closing.
———————————————————————————————
From Seeking Alpha website, by Josh Arnold —

JPMorgan’s (JPM) legal woes got a lot worse over the weekend with its well-publicized $13 billion settlement. JPM already has much more than that set aside to pay legal claims so it’s really a non-event for the bank; they saw it coming to a degree. I’m not here to debate whether or not JPM’s employees misled investors, including Fannie and Freddie, but what I think the most important, and disconcerting, piece of this settlement is the way it was undertaken by the Administration.

Think back to 2008 when the world as we knew it was ending. Smaller financial institutions were failing left and right and even the larger players, including Lehman, Bear Stearns, Washington Mutual, Wachovia and others eventually found themselves in enormous trouble to the point where distressed sales were the only way to stave off bankruptcy (save Lehman, of course). The federal government, eager to avoid a massive crisis, asked JPM, Wells Fargo (WFC) and others to aid the effort to avoid such a calamity. Both obliged and we know history shows JPM ended up with Washington Mutual and Bear Stearns while Wells purchased Wachovia as it was on the cusp of going out of business. At the time, JPM CEO Jamie Dimon famously asked the government, as a favor for bailing out WaMu and Bear Stearns, not to prosecute JPM down the road for the sins of the acquired institutions. This is only fair and it should have gone without saying as the idea of prosecuting an acquirer for something the acquired company did as an independent institution is preposterous.

However, that is exactly where we find ourselves today with the settlement that has been struck. JPM has said publicly that 80% of the losses accrued from the loans that are the subject of this settlement were from Bear and WaMu. This means that, despite Dimon’s asking and the fact that the federal government “urged” JPM to acquire these two institutions, JPM is indeed being punished for something it had nothing to do with. This is a watershed moment in our nation’s history as the next time a financial crisis rolls around, who is going to want to help the federal government acquire failing institutions? Now that we know that the reward for such behavior is perp walks, public shaming via our lawmakers (who can’t even fund their own spending) and enormous legal fines and settlements, I’m thinking it will be harder for the government to find a buyer next time.

Not only is the subject of this legal settlement and the very nature of the way it has been conducted suspect, but even the fines themselves as part of the settlement amount to nothing more than tax revenue. The $13 billion is split up as follows: $9 billion in penalties and fees and $4 billion in consumer relief. The penalties and fees are ostensibly for the “wrongdoing” that JPM must have performed in order to be subject such a historic settlement. These penalties and fees are for allegedly misleading investors in these securities and misrepresenting the strength of the underlying loans. The buyers of these securities, however, were all very sophisticated themselves, including the government sponsored entities. These companies had analysts working on these securities purchases and could very well have realized that the underlying loans were bad. However, Fannie and Freddie blindly purchased the mortgages and were eventually saddled with large losses as a result. But instead of the GSE’s taking responsibility for bad investment decisions, the government has decided to simply confiscate $13 billion from a private sector company while Fannie and Freddie have claimed zero responsibility whatsoever for their role in the losses.

The other $4 billion is earmarked for “consumer relief” but the worst part of this is that these loans were sold to institutions. This means that this consumer relief is simply a bogus way to confiscate more money from JPM and the alleged reason has no basis in reality. The consumer relief portion would suggest that JPM misled the individual consumers taking the loans that were eventually securitized but that is not what the settlement is about. In fact, this is simply a way to redistribute wealth and the Administration is taking full advantage. In order for the redistribution of wealth to make the alleged victims whole it would need to be distributed among the institutions that purchased the securities. So is this part of the settlement, under the guise of “consumer relief”, really just another tax levy? Or is it going to consumers that had absolutely nothing to do with this case? Either way, it’s confiscatory and doesn’t make any sense. Based on reports about this consumer relief portion of the settlement, this money is going wherever the Administration sees fit. In other words, this is simply tax revenue that is being redistributed and given to consumers that have absolutely zero to do with this case.

Even the $9 billion in penalties and fees is going to be distributed among various government agencies and as such, this money is also tax revenue. Otherwise, the money for these agencies would eventually come from the Treasury but instead, JPM is going to foot the bill.

I’m not against companies that have done something wrong being punished. In fact, that is a necessary part of a fair and open capitalist system that allows the free world the economic prosperity it has enjoyed over history. However, this settlement is a clear case of the federal government confiscating private assets in order to redistribute them among government operations and consumers that had absolutely nothing to do with the lawsuit. I am extremely disappointed in the way the Administration has handled this case and other banks should be on notice; it doesn’t matter what you did or didn’t do, if you’ve got the money, the government will come after you.

In terms of what this means for the stock, JPM has already set aside $23 billion for litigation reserves so when the bill comes due for this settlement, JPM has more than enough firepower available to pay it. In fact, this settlement is likely a positive for the stock. Since this is likely to be the largest of the fines/settlements handed down on the Bank of Dimon, the fact that the uncertainty has been lifted should alleviate some concern on the part of investors. In addition to this, since JPM still has a sizable reserve, $10 billion or so, left for additional litigation, investors may be surprised down the road if JPM can actually recoup some of that litigation expense and boost earnings. Not only would that remove a multi-billion drain on book value but it could also increase the bank’s GAAP earnings if all litigation reserves weren’t used up. In any event, even if that is not the chosen path, JPM could still recognize higher earnings in the coming quarters if it sees it needs less money set aside each quarter for litigation reserves. Again, this is very positive for the stock but for more tangible reasons.

The bottom line is that JPM got the short end of the stick with this settlement. Not only is the bank paying for the sins of others but it is paying very dearly and sustaining reputational damage in the process. I couldn’t be more disappointed with the way the Administration’s witch hunt was conducted and the end result. But that is the world we apparently live in now and if you want to invest in banks you need to be prepared to deal with confiscatory fines and levies against banks simply because they can’t stop the government from taking it.

However, JPM is better positioned than perhaps any of its too-big-too-fail brethren to weather the storm and I think that is why there was virtually no movement in the stock when the settlement became public. JPM has been stockpiling litigation reserves when no one was looking and has done well in doing so. With the looming threat of this settlement now come and gone, investors can concentrate on what a terrific money making machine JPM is again. Trading at a small premium to book value and only nine times next year’s earnings estimates, JPM is the safe choice among the TBTF banks. Couple its very cheap valuation with its robust, nearly 3% yield and the largest settlement against a single company in our country’s history behind it and you’ve got a great potential long term buy.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Share this ArticleComments(8)

Don Dion
Oct 23 07:49 AM
Josh,

Great article. See also http://seekingalpha.co…

Don

Even if You Win, Homeowners Must Quiet title and Clear the Negative Report on Their Credit

This is a nice question to answer for people who have already won their cases successfully defending against a wrongful foreclosure. It is nice because homeowners are winning more and more cases. But it is equally relevant to those who are not in litigation and who think they have clear title and are out of the woods because they are current on their payments. The plain truth is that virtually everyone who has a mortgage lien filed against their property which is subject to claims of securitization, sales into the secondary market, assignments, or other transfers have a problem with title. The time to clear that up is now — not when you are trying to sell or refinance or mortgage the home. The quiet title suit could take several months to resolve.

As for the issue of whether the home can still be subject to foreclosure even after the homeowner has won and judgment has been entered, the answer, I’m sorry to say, is Yes. A Judgement for the Homeowner does not legally bar the same or another “lender” (i.e., pretender lender) from alleging a fresh breach from the lack of payments from the homeowner — especially if the claim is for payments “due” after the judgment was entered. But it is true that they have a lot of explaining to do before they can win, which is probably why we have not seen very many actions like that.

And that again is why a suit to Quiet Title is necessary. In addition, the homeowner’s credit has been wrecked, so that must be restored; and there is possible action for damages for slander of credit and related causes of action.

I think where people have gone astray on their opinion that it is completely over once they win a judgment in court is that the judgment does act as a complete bar to the issues that were litigated.

But the issues that were litigated were the ownership of the loan, proving the balance due, etc and the alleged breach by the homeowner. THAT breach has been litigated, but the failure to pay right after the Judgement could be considered another breach.

And since the Judgment is only against the party who initiated the foreclosure against you it does not act as a bar to another party coming in claiming that they are the owner, or even the same party coming in and saying NOW they are the owner and they are suing on non-payment after the Judgement was entered. There are several defenses to such an action but I think we might see the banks test these theories out over the coming months.

DISCONNECT BETWEEN HIGH FINANCE, REALITY AND LAWSUITS

WHAT IS THE EFFECT OF SETTLEMENTS, BUY-BACKS AND FEDERAL RESERVE BUYOUTS?

We hear these stories of settlements, purchases by the Fed, buybacks — but what they are buying and which mortgages are affected is never disclosed. Meanwhile the marketplace and the judicial system are functioning as though none of this activity was happening.
First of all it is never clear exactly what is being purchased. It does not appear as though the mortgages themselves have been purchased —  although that appears to be the claim when Fannie and Freddie are involved. If it is the mortgage bond that is being purchased or settled we don’t know whether all of the mortgage bonds issued by a particular alleged “asset pool” were purchased by the Federal Reserve or if they were the subject of a settlement with investors or regulatory authorities. We don’t know if the asset pool still exists. We don’t know how the money was applied and whether the bond receivable account was satisfied as to the asset pool or the investors.
 But we do know that each mortgage bond purports to convey an indivisible interest in the loans claimed by the asset pool, regardless of whether the loan actually made it into the pool or not. And we know that while the settlements are mostly proportional settlements in which less than 100 cents on the dollar was paid, the Federal Reserve is paying 100 cents on the dollar when the bond is sold. And to add to the complexity, we don’t know the terms of the settlement and whether the banks that are claiming to sell these worthless bonds to the Federal Reserve acquired any evidence of title to the bonds.
In the marketplace, banks are accepting payoffs on mortgages they sold. Then they are executing satisfactions of mortgages they don’t own — and never did own. And in court they are filing Foreclosures on the same mortgages and submitting credit bids on mortgages in which they lack ownership of any type of account receivable in which they fulfill the requirements of a definition of creditor who can submit a credit bid instead of cash. So the deed is issued on foreclosure without any sale having occurred because the property went to the credit bidder. And then the right to redeem  is further corrupted because nobody has bothered to require the production of documents showing the true balance of the receivable account (if there is one) after adjustments for receipt of loss mitigation payments.

UBS settles US mortgage lawsuit
http://www.news.com.au/business/breaking-news/ubs-settles-us-mortgage-lawsuit/story-e6frfkur-1226683410294

Bank Of America Calls Foreclosure Whistleblowers Liars
http://www.huffingtonpost.com/2013/07/12/bank-of-america-foreclosure-whistleblower_n_3588374.html

PRACTICE HINT: DO NOT LEAD WITH QUIET TITLE. YOU CAN’T GET THERE ANYWAY UNTIL AFTER YOU PROVE YOUR CASE THAT THE FORECLOSURE WAS WRONGFULLY BROUGHT. LEAVE THE BURDEN ON THE BANK. Attorney Argues “Produce the Note” and Makes a Bad Situation Worse for Homeowners Facing Foreclosure
http://implode-explode.com/viewnews/2013-07-17_AttorneyArguesProducetheNoteandMakesaBadSituationWorseforHomeown.html

OccupyHomes Rallies Around Homeowners Facing Foreclosure
http://www.truth-out.org/news/item/17579-occupyhomes-rallies-around-citizens-facing-foreclosure

JPMorgan Chase Loses Foreclosure Case in Oregon Jury Trial
http://247wallst.com/housing/2013/07/19/jpmorgan-chase-loses-foreclosure-case-in-oregon-jury-trial/

Hawaii Federal District Court Applies Rules of Evidence: BONY/Mellon, US Bank, JP Morgan Chase Failed to Prove Sale of Note

This quiet title claim against U.S. Bank and BONY (collectively, “Defendants”) is based on the assertion that Defendants have no interest in the Plaintiffs’ mortgage loan, yet have nonetheless sought to foreclose on the subject property.

Currently before the court is Defendants’ Motion for Summary Judgment, arguing that Plaintiffs’ quiet title claim fails because there is no genuine issue of material fact that Plaintiffs’ loan was sold into a public security managed by BONY, and Plaintiffs cannot tender the loan proceeds. Based on the following, the court finds that because Defendants have not established that the mortgage loans were sold into a public security involving Defendants, the court DENIES Defendants’ Motion for Summary Judgment.

Editor’s Note: We will be commenting on this case for the rest of the week in addition to bringing you other news. Suffice it to say that the Court corroborates the essential premises of this blog, to wit:

  1. Quiet title claims should not be dismissed. They should be heard and decided based upon the facts admitted into evidence.
  2. Presumptions are not to be used in lieu of evidence where the opposing party has denied the underlying facts and the conclusion expressed in the presumption. In other words, a presumption cannot be used to lead to a result that is contrary to the facts.
  3. Being a “holder” is a a conclusion of law created by certain presumptions. It is not a plain statement of ultimate facts. If a party wishes to assert holder or holder in due course status they must plead and prove the facts supporting that legal conclusion.
  4. A sale of the note does not occur without proof under simple contract doctrine. There must be an offer, acceptance and consideration. Without the consideration there is no sale and any presumption arising out of the allegation that a party is a holder or that the loan was sold fails on its face.
  5. Self serving letters announcing authority to represent investors are insufficient in establishing a foundation for testimony or other proof that the actor was indeed authorized. A competent witness must provide the factual testimony to provide a foundation for introduction of a binding legal document showing authority and even then the opposing party may challenge the execution or creation of such instruments.
  6. [Tactical conclusion: opposing motion for summary judgment should be filed with an affidavit alleging the necessary facts when the pretender lender files its motion for summary judgment. If the pretender’s affidavit is struck down and/or their motion for summary judgment is denied, they have probably created a procedural void where the Judge has no choice but to grant summary judgment to homeowner.]
  7. “When considering the evidence on a motion for summary judgment, the court must draw all reasonable inferences on behalf of the nonmoving party. Matsushita Elec. Indus. Co., 475 U.S. at 587.” See case below
  8. “a plaintiff asserting a quiet title claim must establish his superior title by showing the strength of his title as opposed to merely attacking the title of the defendant.” {Tactical: by admitting the note, mortgage. debt and default, and then attacking the title chain of the foreclosing party you have NOT established the elements for quiet title. THAT is why we have been pounding on the strategy that makes sense: DENY and DISCOVER: Lawyers take note. Just because you think you know what is going on doesn’t mean you do. Advice given under the presumption that the debt is genuine when that is in fact a mistake of the homeowner which you are compounding with your advice. Why assume the debt, note , mortgage and default are genuine when you really don’t know? Why would you admit that?}
  9. It is both wise and necessary to deny the debt, note, mortgage, and default as to the party attempting to foreclose. Don’t try to prove your case in your pleading. Each additional “explanatory” allegation paints you into a corner. Pleading requires a short plain statement of ultimate facts upon which relief could be legally granted.
  10. A denial of signature on a document that is indisputably signed will be considered frivolous. [However an allegation that the document is not an original and/or that the signature was procured by fraud or mistake is not frivolous. Coupled with allegation that the named lender did not loan the money at all and that in fact the homeowner never received any money from the lender named on the note, you establish that the deal was sign the note and we’ll give you money. You signed the note, but they didn’t give you the money. Therefore those documents may not be used against you. ]

MELVIN KEAKAKU AMINA and DONNA MAE AMINA, Husband and Wife, Plaintiffs,
v.
THE BANK OF NEW YORK MELLON, FKA THE BANK OF NEW YORK; U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR J.P. MORGAN MORTGAGE ACQUISITION TRUST 2006-WMC2, ASSET BACKED PASS-THROUGH CERTIFICATES, SERIES 2006-WMC2 Defendants.
Civil No. 11-00714 JMS/BMK.

United States District Court, D. Hawaii.
ORDER DENYING DEFENDANTS THE BANK OF NEW YORK MELLON, FKA THE BANK OF NEW YORK AND U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR J.P. MORGAN MORTGAGE ACQUISITION TRUST 2006-WMC2, ASSET BACKED PASS-THROUGH CERTIFICATES, SERIES 2006-WMC2’S MOTION FOR SUMMARY JUDGMENT
J. MICHAEL SEABRIGHT, District Judge.
I. INTRODUCTION

This is Plaintiffs Melvin Keakaku Amina and Donna Mae Amina’s (“Plaintiffs”) second action filed in this court concerning a mortgage transaction and alleged subsequent threatened foreclosure of real property located at 2304 Metcalf Street #2, Honolulu, Hawaii 96822 (the “subject property”). Late in Plaintiffs’ first action, Amina et al. v. WMC Mortgage Corp. et al., Civ. No. 10-00165 JMS-KSC (“Plaintiffs’ First Action”), Plaintiffs sought to substitute The Bank of New York Mellon, FKA the Bank of New York (“BONY”) on the basis that one of the defendants’ counsel asserted that BONY owned the mortgage loans. After the court denied Plaintiffs’ motion to substitute, Plaintiffs brought this action alleging a single claim to quiet title against BONY. Plaintiffs have since filed a Verified Second Amended Complaint (“SAC”), adding as a Defendant U.S. Bank National Association, as Trustee for J.P. Morgan Mortgage Acquisition Trust 2006-WMC2, Asset Backed Pass-through Certificates, Series 2006-WMC2 (“U.S. Bank”). This quiet title claim against U.S. Bank and BONY (collectively, “Defendants”) is based on the assertion that Defendants have no interest in the Plaintiffs’ mortgage loan, yet have nonetheless sought to foreclose on the subject property.

Currently before the court is Defendants’ Motion for Summary Judgment, arguing that Plaintiffs’ quiet title claim fails because there is no genuine issue of material fact that Plaintiffs’ loan was sold into a public security managed by BONY, and Plaintiffs cannot tender the loan proceeds. Based on the following, the court finds that because Defendants have not established that the mortgage loans were sold into a public security involving Defendants, the court DENIES Defendants’ Motion for Summary Judgment.

II. BACKGROUND

A. Factual Background
Plaintiffs own the subject property. See Doc. No. 60, SAC ¶ 17. On February 24, 2006, Plaintiffs obtained two mortgage loans from WMC Mortgage Corp. (“WMC”) — one for $880,000, and another for $220,000, both secured by the subject property.See Doc. Nos. 68-6-68-8, Defs.’ Exs. E-G.[1]

In Plaintiffs’ First Action, it was undisputed that WMC no longer held the mortgage loans. Defendants assert that the mortgage loans were sold into a public security managed by BONY, and that Chase is the servicer of the loan and is authorized by the security to handle any concerns on BONY’s behalf. See Doc. No. 68, Defs.’ Concise Statement of Facts (“CSF”) ¶ 7. Defendants further assert that the Pooling and Service Agreement (“PSA”) dated June 1, 2006 (of which Plaintiffs’ mortgage loan is allegedly a part) grants Chase the authority to institute foreclosure proceedings. Id. ¶ 8.

In a February 3, 2010 letter, Chase informed Plaintiffs that they are in default on their mortgage and that failure to cure default will result in Chase commencing foreclosure proceedings. Doc. No. 68-13, Defs.’ Ex. L. Plaintiffs also received a March 2, 2011 letter from Chase stating that the mortgage loan “was sold to a public security managed by [BONY] and may include a number of investors. As the servicer of your loan, Chase is authorized by the security to handle any related concerns on their behalf.” Doc. No. 68-11, Defs.’ Ex. J.

On October 19, 2012, Derek Wong of RCO Hawaii, L.L.L.C., attorney for U.S. Bank, submitted a proof of claim in case number 12-00079 in the U.S. Bankruptcy Court, District of Hawaii, involving Melvin Amina. Doc. No. 68-14, Defs.’ Ex. M.

Plaintiffs stopped making payments on the mortgage loans in late 2008 or 2009, have not paid off the loans, and cannot tender all of the amounts due under the mortgage loans. See Doc. No. 68-5, Defs.’ Ex. D at 48, 49, 55-60; Doc. No. 68-6, Defs.’ Ex. E at 29-32.

>B. Procedural Background
>Plaintiffs filed this action against BONY on November 28, 2011, filed their First Amended Complaint on June 5, 2012, and filed their SAC adding U.S. Bank as a Defendant on October 19, 2012.

On December 13, 2012, Defendants filed their Motion for Summary Judgment. Plaintiffs filed an Opposition on February 28, 2013, and Defendants filed a Reply on March 4, 2013. A hearing was held on March 4, 2013.
At the March 4, 2013 hearing, the court raised the fact that Defendants failed to present any evidence establishing ownership of the mortgage loan. Upon Defendants’ request, the court granted Defendants additional time to file a supplemental brief.[2] On April 1, 2013, Defendants filed their supplemental brief, stating that they were unable to gather evidence establishing ownership of the mortgage loan within the time allotted. Doc. No. 93.

III. STANDARD OF REVIEW

Summary judgment is proper where there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c). The burden initially lies with the moving party to show that there is no genuine issue of material fact. See Soremekun v. Thrifty Payless, Inc., 509 F.3d 978, 984 (9th Cir. 2007) (citing Celotex, 477 U.S. at 323). If the moving party carries its burden, the nonmoving party “must do more than simply show that there is some metaphysical doubt as to the material facts [and] come forwards with specific facts showing that there is a genuine issue for trial.” Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574, 586-87 (1986) (citation and internal quotation signals omitted).

An issue is `genuine’ only if there is a sufficient evidentiary basis on which a reasonable fact finder could find for the nonmoving party, and a dispute is `material’ only if it could affect the outcome of the suit under the governing law.” In re Barboza,545 F.3d 702, 707 (9th Cir. 2008) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). When considering the evidence on a motion for summary judgment, the court must draw all reasonable inferences on behalf of the nonmoving party. Matsushita Elec. Indus. Co., 475 U.S. at 587.

IV. DISCUSSION

As the court previously explained in its August 9, 2012 Order Denying BONY’s Motion to Dismiss Verified Amended Complaint, see Amina v. Bank of New York Mellon,2012 WL 3283513 (D. Haw. Aug. 9, 2012), a plaintiff asserting a quiet title claim must establish his superior title by showing the strength of his title as opposed to merely attacking the title of the defendant. This axiom applies in the numerous cases in which this court has dismissed quiet title claims that are based on allegations that a mortgagee cannot foreclose where it has not established that it holds the note, or because securitization of the mortgage loan was defective. In such cases, this court has held that to maintain a quiet title claim against a mortgagee, a borrower must establish his superior title by alleging an ability to tender the loan proceeds.[3]

This action differs from these other quiet title actions brought by mortgagors seeking to stave off foreclosure by the mortgagee. As alleged in Plaintiffs’ pleadings, this is not a case where Plaintiffs assert that Defendants’ mortgagee status is invalid (for example, because the mortgage loan was securitized, Defendants do not hold the note, or MERS lacked authority to assign the mortgage loans). See id. at *5. Rather, Plaintiffs assert that Defendants are not mortgagees whatsoever and that there is no record evidence of any assignment of the mortgage loan to Defendants.[4] See Doc. No. 58, SAC ¶¶ 1-4, 6, 13-1 — 13-3.

In support of their Motion for Summary Judgment, Defendants assert that Plaintiffs’ mortgage loan was sold into a public security which is managed by BONY and which U.S. Bank is the trustee. To establish this fact, Defendants cite to the March 2, 2011 letter from Chase to Plaintiffs asserting that “[y]our loan was sold to a public security managed by The Bank of New York and may include a number of investors. As the servicer of your loan, Chase is authorized to handle any related concerns on their behalf.” See Doc. No. 68-11, Defs.’ Ex. J. Defendants also present the PSA naming U.S. Bank as trustee. See Doc. No. 68-12, Defs.’ Ex. J. Contrary to Defendants’ argument, the letter does not establish that Plaintiffs’ mortgage loan was sold into a public security, much less a public security managed by BONY and for which U.S. Bank is the trustee. Nor does the PSA establish that it governs Plaintiffs’ mortgage loans. As a result, Defendants have failed to carry their initial burden on summary judgment of showing that there is no genuine issue of material fact that Defendants may foreclose on the subject property. Indeed, Defendants admit as much in their Supplemental Brief — they concede that they were unable to present evidence that Defendants have an interest in the mortgage loans by the supplemental briefing deadline. See Doc. No. 93.

Defendants also argue that Plaintiffs’ claim fails as to BONY because BONY never claimed an interest in the subject property on its own behalf. Rather, the March 2, 2011 letter provides that BONY is only managing the security. See Doc. No. 67-1, Defs.’ Mot. at 21. At this time, the court rejects this argument — the March 2, 2011 letter does not identify who owns the public security into which the mortgage loan was allegedly sold, and BONY is the only entity identified as responsible for the public security. As a result, Plaintiffs’ quiet title claim against BONY is not unsubstantiated.

V. CONCLUSION

Based on the above, the court DENIES Defendants’ Motion for Summary Judgment.

IT IS SO ORDERED.

[1] In their Opposition, Plaintiffs object to Defendants’ exhibits on the basis that the sponsoring declarant lacks and/or fails to establish the basis of personal knowledge of the exhibits. See Doc. No. 80, Pls.’ Opp’n at 3-4. Because Defendants have failed to carry their burden on summary judgment regardless of the admissibility of their exhibits, the court need not resolve these objections.

Plaintiffs also apparently dispute whether they signed the mortgage loans. See Doc. No. 80, Pls.’ Opp’n at 7-8. This objection appears to be wholly frivolous — Plaintiffs have previously admitted that they took out the mortgage loans. The court need not, however, engage Plaintiffs’ new assertions to determine the Motion for Summary Judgment.

[2] On March 22, 2013, Plaintiffs filed an “Objection to [87] Order Allowing Defendants to File Supplemental Brief for their Motion for Summary Judgment.” Doc. No. 90. In light of Defendants’ Supplemental Brief stating that they were unable to provide evidence at this time and this Order, the court DEEMS MOOT this Objection.

[3] See, e.g., Fed Nat’l Mortg. Ass’n v. Kamakau, 2012 WL 622169, at *9 (D. Haw. Feb. 23, 2012);Lindsey v. Meridias Cap., Inc., 2012 WL 488282, at *9 (D. Haw. Feb. 14, 2012)Menashe v. Bank of N.Y., ___ F. Supp. 2d ___, 2012 WL 397437, at *19 (D. Haw. Feb. 6, 2012)Teaupa v. U.S. Nat’l Bank N.A., 836 F. Supp. 2d 1083, 1103 (D. Haw. 2011)Abubo v. Bank of N.Y. Mellon, 2011 WL 6011787, at *5 (D. Haw. Nov. 30, 2011)Long v. Deutsche Bank Nat’l Tr. Co., 2011 WL 5079586, at *11 (D. Haw. Oct. 24, 2011).

[4] Although the SAC also includes some allegations asserting that the mortgage loan could not be part of the PSA given its closing date, Doc. No. 60, SAC ¶ 13-4, and that MERS could not legally assign the mortgage loans, id. ¶ 13-9, the overall thrust of Plaintiffs’ claims appears to be that Defendants are not the mortgagees (as opposed to that Defendants’ mortgagee status is defective). Indeed, Plaintiffs agreed with the court’s characterization of their claim that they are asserting that Defendants “have no more interest in this mortgage than some guy off the street does.” See Doc. No. 88, Tr. at 9-10. Because Defendants fail to establish a basis for their right to foreclose, the court does not address the viability of Plaintiffs’ claims if and when Defendants establish mortgagee status.

Follow

Get every new post delivered to your Inbox.

Join 3,559 other followers

%d bloggers like this: